occur? >> well, mr. chairman, this is a complicated subject. i have to take it piece by piece kind of. would that be okay? >> sure. let's go piece by piece. take the document binder right there. go to binder number -- tab number 16, and we'll go through it piece by piece. >> 16? >> look under tab 16. in august the fda inspectors went into your facilities. the conditions they found were appalling. let me show you some photographs from the inspection. it's a photograph i put up during my opening statement of decaying chickens in your egg laying facilities. you said you're following sophisticated procedure to keep your facilities clean. how do you explain dead chickens in your hen laying houses?

>> mr. congressman -- >> wait a minute, i'm sorry. i'm talking to mr. decoster, jack decoster. >> he doesn't run the operation. i do. >> i know, but he testified he cleaned eed -- when you were s you didn't have these problems. do you want to answer? >> yes, sir. >> how do you account for dead chickens then? >> there's eight dead hens here in the back of the building, and, you know, it's kind of like a large city with 80,000 birds in the building. >> sure. >> occasionally we will have some mortality and these are taken to the back of the barn. now, our policy is to have these in a barrel. >> but they weren't at the time, were they? >> no, sir, they're not. >> go through the other photos, the mice along the conveyor belt for the eggs. >> would this not be acceptable -- >> go through there. look at the manure coming out of the building from the foundations, the door.

this isn't something that just happened overnight. that manure pile is about seven to eight feet tall. it's seeping out through cracks. so number one, you have too much manure. it's flowing out of your buildings. you got cracks. you got dead mice. you got dead chickens, maggots. that stuff just didn't happen. i agree you're a big operation, but with big operations some big responsibilities. how did you clean up your act if you started clean an now you cleaned up your act? >> in the case -- if i could just kind of go one at a time here on the photos. the one that shows the door being gapped open with the manure, these houses, as you can see, it's a house that's basically 18 foot at the eaves. it's a two-story structure. >> sure. >> the hen population is in the top story. the building is designed to have these manure pits and i know this is -- has got a lot of press, but this is a standard practice in the industry to have

manure underneath the birds and then to be taken out. the problem we had here, the manure accumulation in the pit i agree with you is not overnight. the doors coming open like this is basically an overnight problem. the weather through this past winter and this past spring in iowa has been unbelievably, the likes we've never seen before, and the local co-op who takes our manure out for us was just behind. they had got behind. i take full responsibility -- >> or maybe you have too many birds in the house? maybe you have too many laying hens in the house that the house can't handle all the manure coming down snp do you have too many birds? >> no, sir, the house has got 80,000 birds. it's designed for 101,000. the reason we have 80,000 is we follow the uep animal welfare guidelines. >> okay. >> but this problem was cleaned up that very day that this

picture was taken. what the picture doesn't show you is there's a manure crew on site taking this manure out. >> did the decoster farms, you as operating officer, you knew about the fda putting out a final rule in july. did you comment while that rule was being developed? did you comment, submit comments to the fda on how you thought the rule should be? >> i don't believe i commented on -- the rule that came out in '09. >> you didn't need the rule to know this was unacceptable. >> this doesn't have much to do with the rule. >> i realize that. >> the problem i have with this is not the manure in the pit but the fact that the door is gapped open and it can allow mice inside our facility. >> there's also another photo of manure coming out of the side. there's holes in your building and the mice would have been going in but they couldn't get in because the manure was going out. my time is expired. mr. burgess for questions.

>> thank you, mr. chairman. >> mr. bethel, i understand you've asserted your privilege but nevertheless i want to ask you one question. please feel free to answer it if you wish. an e-mail dated august 31st, 2010, from you to john glessner states, quote, hilldale needs to totally disassociate itself from jack and it has to be real. hillendale has a good business base, but it will be all gone if i don't move quickly and i will not try to deceive the public, close quote. first, do you recall sending this e-mail? is the reference to jack, jack decoster, and further why did you state that hillendale needs to disassociate itself from jack decoster and why did you feel a need to state that you will not try to deceive the public? had someone previously asked you to deceive the public and if so, would you please share with the committee who that would be? >> i respectfully decline to answer the question based on --

>> sir, mr. bethel, would you please turn on the mike and pull it forward and then read your statement again. >> i respectfully decline to answer the question based on the protection afforded me under the fifth amendment of the constitution. >> i appreciate that as the chairman did not excuse you as a witness, i felt obligated to ask you that question because it was an important part of our investigation. so mr. decoster, and either mr. decoster, let me ask you this. you have seen the photographs. we've talked about the photographs taken by the food and drug administration inspectors at your farms to document the observations made in form 483 and show what appear to be astonishingly unsanitary conditions. how would you characterize these photographs and do they warrant the alarm and concern being voiced here today and if not, share with us why not. >> yes, sir, thank you. and i haven't looked at all of them in detail, mr. congressman,

but the rodents that were brought up in the 483, if we could take that one first, there was 31 rodents that was counted by fda, and those 41 rodents were found going through over 107 barns that we own. these barns cover approximately 66 acres of ground just on the upper level, not counting the manure pits. >> rather than going through and dissecting out the data, do you think the alarm that has been evidenced here today, is that warranted? >> i would like to invite each and every member of this board to come and view -- >> i wish we had had that opportunity also, mr. decoster but it wasn't afforded to us by the majority.

let's go on. i may submit some questions to you in writing but as you see the chairman has a pretty quick gavel with me. prior to the fda ag rule there were no federal requirements, testing requirements, for salmonella at egg production facilities, but some states and some industry groups voluntarily set guidelines. if the salmonella testing was not required by law, why -- when and why did you start testing for salmonella? >> our reason for testing for salmonella, we first originally started testing to see if we may have it. we didn't have any trace bags, we didn't have any reported illnesses. there was no government agency that says that we should test. we tested voluntarily because we were trying to learn if we had the problem and then if we did have the problem, what would be the best practices that we could set forward -- >> i'm going to interrupt you again. i'm not trying to be rude but let me just suggest that if you

took 72 swabs in one day and all but 8 tested positive, you've got a problem. >> yes. >> can i suggest that to you? >> well, you can suggest it, sir. but i'd like to talk to dr. chuck holfecker. he's the expert on this. he's been guiding us -- >> let me submit that to you in writing because i want to get an additional question in. prior to the egg rule when your company received a positive environmental result for salmonella, what corrective action did you take and did you automatically test the eggs as a precautionary measure? >> the results -- we've been taking this kind of as over a period of time we've been learning more, been working with the doctor, but we've implemented things such as vaccinating and then vaccinating the flocks twice as we learn more. we've eliminated mot ed molting system and --

>> i'm about to run out of time. when did the fda come to you and suggest that you needed to recall your eggs? do you remember the calendar date? >> i'm going to say the first initial contact was a phone call, and that would have been august 12th. >> and what date did you institute the recall? >> the very following day. we received that call that late afternoon and the very next day we issued the recall. zproo. >> were you required to do so? >> no, sir. it was a voluntary measure. >> thank you, mr. chairman, i appreciate your indulgence. >> thank you. does any other member wish to ask mr. bethel a question since i'm about to excuse him. i would ask members to refrain from asking him a question. the reason why i did not dismiss you after because mr. burgess was insisting on asking you a question. it's not -- because if i wouldn't have given him the opportunity, he would have accused me of censorship. i thought i'd give him that

opportunity. does any other member? seeing no other response, mr. beth bethel, you certainly invoked your rights and that's your right and privilege and thank you for being here, but you will be dismissed from this panel. >> thank you. mr. waxman for questions. >> thank you, mr. chairman. mr. jack decoster, how long have you been in this business of chickens and eggs? >> since 1949, september 5th when my dad died. >> so you inherited the business from your father as your son is doing the business with you. >> yes. he had 125 hens. i took them over. >> now, you've had a history of over 30 years of problems with salmonella infected eggs, and you had a pretty sordid record.

you said it was because you were a small operation and you got bigger and you still operated as if you were a small operation. you had problems in the '90s and you had problems in maine and maryland. now you're in iowa, and you don't want to have any problems anymore, so you said you really tried to change your operation. you modernized and cleaned up the facility, but that's not what the record indicates. fda conducted an inspection. they did this last august. i want to read you some passages, ask you to respond. they found, quote, you failed to achieve satisfactory rodent and pest control as evidenced by the following, live and dead flies too numerous to count, the live flies were on and around egg

belts, feed, and shell eggs. in addition, live and dead maggots too numerous to count were observed. does this sound like a clean facility to you? >> mr. congressman, if you don't mind i'd like to answer those 483 questions for iowa. >> well, i'm happy to hear from you because you're very much involved in running the operation now, but your father has been in this business for longer than you have, and he wanted to make sure he's living up to a higher standard. i want to know if he feels this is a higher standard. >> okay. well, higher standards in the state of maine where i live -- >> i'm not asking about maine. i'm asking about the report of the inspection from the fda. you were determined to run a clean operation, and they found all these dead flies and maggots and other problems. >> okay. >> does that bother you? >> it bothers me a lot, but i feel like, peter, we have a

certain way we handle flies, a certain way we handle mice, and we have hired maxi nolan who is considered an expert. >> when did you hire him? >> maxi has been coming out to our facility since last summer, and he set up our fly and rodent program. >> i want to read to you another finding from the fda, and you may want to consider firing this guy. the fda said you failed to take steps to ensure that there is not introduction or transfer of se, salmonella, into our among the poultry houses. that was evidenced by the following observations. uncaged birds, chickens having escaped were observed in the egg laying operation in contact with the egg laying birds. the uncaged birds were using the manure which was approximately eight feet high, to access the egg laying area.

what this means is that the chickens had escaped the hen house. they're walking in the manure pits and then mixing in with the caged birds. do you agree with the fda that this is a violation of appropriate safety standards? or procedures? >> we're find of jumping around a little bit we're going to rodents to flies to loose chickens, but if we want to stick with the loose chicken for a minute, they observed two or three loose chickens that had got out of their cages in a couple different houses and in the course of our barnmen doing their work, they will access the cage for whether it be a sick hen, a water nipple that may be leaking or need repair, and a chicken can escape when they open the door or if they forget to close the door completely, a chicken can escape. these chickens -- >> mr. decoster, let me interrupt you to say this, you've had problems in the past, right? over 30 years of problems in

different states. you had a call from the fda to recall your eggs and you voluntarily did that, and then the inspection took place. >> yes. >> that's when the fda found all these problems. you've claimed that you're going to modernize and clean up your facility. but it doesn't appear that you have modernized and cleaned up your facilities. it sounds like to me that both of you are refusing to take responsibility for a very poor facility. according to the fda inspections, they found all these problems, you would think after you were called on to recall the eggs you would have made sure your facility was cleaned up. maybe you did. maybe this is as clean as you got it, but it still looked pretty dirty. how do you respond to that? >> well, hopefully i'll be allowed to finish this time, but i mean we're jumping all over the place. you're not giving me fair time to answer the question, and then -- >> then i'm going to have your

father respond because he talked about how he wanted to clean up the facility. and i want to ask him to tell us whether he approves the conditions and how his son operates the facility. and after this fda inspection, all of these problems they just found, after the recall already started, do you think this is a satisfactory way for the facility to be run? >> mr. congressman -- >> i've asked your father. i've asked your father, and i'm asking the questions. mr. jack decoster? >> yes. i follow what you're saying, okay. however, this is a very big operation. we have a certain way we go about running it. regardless -- >> you had problems when you ran it that way and you were going to clean it up. so is this where you are now is you feel cleaned up and adequate? >> sir, please, let me talk,

okay? we have a certain way that our barnman goes into the chicken house. he has a certain way he does this work, okay? he starts in the morning. he pulls out the dead chickens. he spends a certain amount of time checking the egg belts, taking the dead chickens out, checking the water, chickieckine lights. then he goes and he sweeps all of the barnes. he goes into the pits. he checks the leaking water is coming down from upstairs into the pit. he checks loose birds in the pit. he puts lightbulbs in if there's any missing lightbulbs. he's supposed to be checking this door that was pushed out. that door would not stay like that very long. >> mr. decoster, we only have a certain amount of time and my time is pretty much over but i do want to tell you this. >> i'm sorry. >> it's hard for me to reconcile your words that you wanted to clean up and you did clean up the facility with the record

before the committee. the conditions in your facility were not clean. they were not sanitary. they were filthy, and given the 30-year record of violations it appears that you are a habitual violator. for you to come before us and say it's the feed, we had nothing to do with it, it's hard for me to believe and accept on -- at face value. my time is expired but i just want you to know my thoughts about it. >> gentleman's time has expired. >> thank you very much, mr. chairman. mr. decoster, peter, looking at this report, this 483, the date issued was august the 30th, how often has the fda been inspecting? >> that's the first time the fda has been to our facilities. >> any of your facilities.

>> well, for the barns. >> okay. >> chicken barns. >> let me ask, is the usda on your premises at all times at the different houses? >> the usda/ams does grading of our processing plants, all of our processing facilities. we have the voluntary program of usda which we incur the cost. >> okay. but again, i know i have been in different houses and facilities, and there's usually somebody from usda. is there a usda person on the premises part of the time, all of the time? >> usda would be in the processing plant during the hours of operation generally from 6:00 in the morning until whenever we finish in the afternoon. >> do you have the department of agricultural in iowa inspecting out there? does the department of

agricultural in iowa inspect facilities? >> no, sir, the dnr would inspect any environmental-type issues, but the department of ag has never been out to inspect. >> what's your dnr do? >> it stands for the department of natural resources -- >> right, but what's their role on the farm then? >> their role is basically on any environmental issue. if manure threatens the water of the states would be one of the major ones. >> when they -- do they do like an inspection of the houses, around the facility? do they do water quality tests? i come from the largest county in the state of ohio that has ditches. i got 3,000 miles of ditches in my home county and so are they doing water qualiul teslity tes? >> the only thing they would inspect on the facility is a complaint or if there was an annual inspection on the lagoons.

>> okay. and talk about like with the lagoon, and i heard what you said about it was a wet spring out there and i know it was a wet spring in ohio. trying to get crops out. what's your manure management plan? do you have to file that with someone? >> yes. there's manure management plans on every one in iowa. because we do the sale of our manure with the local co-op who use it is for fertilizer, they have the manure management plan. >> who do you file the plan with? >> the dnr. >> dnr. okay. because i know we just talked about looking at water quality and things like that, does the dnr then do any inspection around the buildings then on th that? >> not on a regular basis, but

the dnr i guess after reading some of the articles in the newspaper came up and did an inspection around our layer barns and said everything looked okay. i haven't heard anything more. >> let me ask you then, when you say not that often, how often would they come around from dnr on that end? >> normally under those type circumstances if they're called out to do it. >> so they wouldn't do it on like a six-month or a 12-month basis? >> no. >> now, who hauls -- how often do you have to clean your barns? are your barns deep pit or do you have conveyor or -- >> the majority of our barns are deep pit like the pictures show here but we do have one facility that's a belt battery where the manure is removed on a daily basis and put in another barn. >> and then with the deep pit, how do you get that out? are you using like skidders,

bobcats? >> yes, skid steers. bobcat would be a brand that's used but they go through these doors shown in the picture. >> how often would they do that? >> our program was to clean every barn every other year. we did that for a measure of fly control, fresh manure you tend to have the better environment for the flies. so we were going with every other year which we have changed that policy last year to remove the manure every year. >> okay. mr. chairman, i think my time has expired and i yield back. >> thank you. questions, please. >> thank you. gentlemen, you were here earlier when i delivered the ode to the iowa egg, and i can tell you i have personally been supporting the iowa egg industry for 53 years and there's no bigger fan of the products you produce, but i also was sitting down to breakfast in a restaurant when i first heard about this story,

and i can tell you it literally made me sick to my stomach and caused me to order something different on the menu and then i was down at the iowa state fair earlier this year in the varied industries building looking at a lot of very nervous egg producers with the iowa egg council. so i'm going to ask each one of you, do you feel any personal responsibility to the impact that this recall, this massive recall, is having on iowa egg producers? >> it is too bad that this occurred and we do feel sorry for any inconvenience and costs that it has caused the industry. >> i apologize to the two messrs. decoster but it's easier if i refer to your by your first names if that's all right? >> that's fine.

>> peter. >> absolutely. this is an issue that i feel terrible has occurred and it's affecting our industry. >> jack? >> i feel very bad about it, very bad. it's a horrible thing. >> well, the problem that egg producers in iowa and all over the country are facing is a series of headlines like the one in today's "new york times," an iowa egg farmer and a history of salmonella. "the slangs times" filthy conditions found at egg producers. egg farms violated safety rules. fda details numerous violations at egg farms. egg recall, mouse/fly infestations date back ten years workers say. tainted eggs reveal lapse in state protocol. and the problem that a lot of us have here on this committee is a sense that there is a disconnect between the problems identified in these stories and identified in the fda's investigation and

the sense of responsibility, and we had two witnesses who testified at the earlier panel who talked about the personal impact that the salmonella contamination had on them. here is the story in today's "new york times." on july th, scores of chronically ill patients in new york city began to fall violently ill with food poisoning from eggs tainted with salmonella. it was like a war zone, said dr. phillip tacey, the doctor on calls a sickness started to rage through the hospital. by the time the outbreak ended, nine people had died and 500 people had become sick. it remaybes the deadliest outbreak in this country attributed to eggs with salmonella. this year the same bacteria sickened thousands of people nationwide. despite the gap of decades, there's a crucial link between

the two outbreaks. in both cases the eggs came from farms owned by austin j. decoster, one of the country's biggest egg producers. and, jack, i think one of the things that people around the country are asking is if your company's commitment to food safety is as strong as you've indicated in your opening statement to this committee, how is it possible that after all this time we have another decoster egg producer involved in a half billion dollar recall? >> well, the question is complicated, sir. >> i'd like the record to reflect that counsel for the witness has handed him a document. >> congressman, this se happened

23 years ago in one of our farms in maryland. we destroyed the flocks. after we destroyed the flocks, we cleaned it all out, washed it all up, and then put the new pullets in it, and then it wasn't very long after that that -- after we put the new pullets in which we bought these pullets from a company in indiana, they wasn't ones that we raised or at least not all of the ones we put in the complex, and after we got it all filled up again with new birds, all clean, we thought, and we had

also a person from pennsylvania, a doctor, coming down to our flocks and testing all of them, reporting that they were okay, and then we had a reason to take a bird or a few birds down to the salisbury laboratory in maryland, and we took them down and they found se in a bird or -- i don't remember too clearly right now, but at least found salmonella in the birds. so then fda came over to our place and way back then fda came over, and they tested every one of our flocks in our chicken houses and if i remember this correctly, this is a long time ago, but we had to take out at least half of all the flocks again. it was a seven-house complex, we had to take at least three to

four flocks out. we had to wash it all again, and then we filled it back up again, and then as i remember it the next time it was okay. >> mr. chairman, my time has expired but i would ask unanimous consent to submit the editorials i referred to earlier in my questioning. >> without objection. before they're entered, request to see them so if you'd provide them, we'll look at them. without objection we'll put it in. mr. dingell for questions, please. >> thank you, mr. chairman, and i commend you for this hearing and for the extraordinary leadership you've given in our efforts to reform and to enhance the powers of fda. my questions are going to remind me of a day in 1990 when this subcommittee went into the

questions of food safety and, indeed, in solomon knell la in eggs. bike to welcome you both, messrs. decoster and i begin my question by saying this. of the food and drug administration staff reports which i ask unanimous consent be inserted in the record, refer to inquiries about your facilities, and they say barns were infested with flies, maggots, and scurrying rodents, mature pile eight feet high in certain areas, leaking mature pits, employees working without protective clothing, and uncaged hens tracking manure from mature pit to other areas of the operation. is that true? >> we've -- if we could take one of these at a time. the comment about the employees -- >> it's either true or not. is it true or is it not true?

yes or no? >> i would say that it's partially true. >> partially true. well, that's like being partially pregnant. it's pretty hard to do. now, having said this, you were having trouble in the '90s, and it resulted in a calamitous situation at the bird s. kohler memorial hospital in new york just referred to by one of my colleagues. i'm curious here. do you dispute any of the allegations made in the reports by food and drug? yes or no. >> on the 483? >> the reports of the food and drug staff to food and drug. do you dispute any of the statements in those with regard

to the conditions at your farms? >> yes, sir. when we did our -- >> specifically which ones do you dispute? >> okay. the one that you brought up about the people going from the one barn to another. that was not specified in the fda's rule. it says even in their guidance document -- >> is that your only dispute? >> no, sir. >> what others do you dispute? >> well, the dispute we had also, they named some manure doors that they said was pushed open with manure and they were not. there was only four doors that were like that out of 292. >> all right. >> now -- do you dispute the finding that there were dead mice and flies too numerous to count? >> i would say there were live and dead flies. this is a farm. they are chicken barns.

we have a very stringent fly program that dr. in accordannol out. >> do you dispute the statement of food and drug that these conditions do not promote safety and quality? >> i guess i'm not familiar with that. >> okay. >> statement. >> what plans do you have in place to prevent salmonella contamination? >> we've outlined a very extensive plan that we submitted to the fda. >> would you submit those plans for the record? if you please. >> yes, i would be more than happy to. >> now, i understand that two positive se samples were collected from your feed mill. is this true? >> yes, there was two swabs that were positive. >> the source is thought to be a raw ingredient acquired from a

third party. is this true? >> that's what we believe, sir. >> now, what level of responsibilities do you have for the ingredients you receive from third parties and subsequently use in your operations? >> we've put in a full array of testing. we're taking samples from every incoming load. we've talked to all of our vendors for them also to do testing. we're doing a composite on these loads weekly and send them in for testing. we're going to do a monthly swabbing of our feed mill. we are currently in the process of completely cleaning and disinfecting the entire mill from top to bottom. and we've done extensive employee training to make sure that the mill is kept tightened up so that there's no open hatches as noted in the 483. >> what steps do you take to

ensure that those planned or announced safeguards are implemented? >> we have a daily inspection by the mill manager. then we have an outside supervisor who is going to inspect the facilities once a week and give me a full report. >> do you still have your hog operations? >> we own some hog facilities but we don't own any -- we don't operate hog facilities. we just lease them. >> i see. mr. chairman, i note with some distress my time is up, and i thank you for your courtesy. >> thank you, mr. dingell. >> thank you, mr. chairman. mr. decoster, your company hires a private auditing company to audit wright county farms be a you'lly, correct? >> yes, ma'am. >> and this company is aib which is a private for profit food safety auditing firm, correct?

>> right. they're -- >> thank you. and if you'll turn to page -- i'm sorry, tab five of the notebook in front of you, on june 7th and 8th, 2010, your farm was actually inspected by aib, correct? >> yes, ma'am. >> and aib actually issued a superior certificate to the farm, correct? >> yes, they did. >> and this has been happening -- you get inspected annually and if you'll take a look at tab seven of your notebook, on august 20th, 2008, the farm was also -- i'm sorry. that's a different one. let's just stick with tab five for a minute. so aib audited your company in 2008 two times, four times in 2009, and at least one time in

2010, and every time you were found to be superior. is that correct? >> yes. this is an inspection of the processing facility. >> uh-huh. >> and not of the chicken barn. >> okay. and what i wanted to talk about with tab seven, if you'll look at that, unbelievably to this committee in 2009 aib was the same auditor that audited the peanut corporation of america and also gave them a superior recommendation. do you see that in your notebook as well? >> yes, ma'am. >> so here is the thing. both the peanut corporation of america and wright county egg paid aib to audit their companies and received superior ratings right before both companies sold product that is sickened thousands of people with salmonella. mr. chairman, i bring this up to say that just relying on

third-party auditors is not going to guarantee consumer safety, which is why getting back to all of our point, we need to pass this bill. i wanted to ask you a couple of questions. in your opening statement, you said in order to get fresh quality eggs to market, hillendale must be able to rely on good production and good processing, correct? >> that is correct. >> you can't have good production and good processing without a clean and up to standard facility, correct? >> yes. >> and you also said in your opening statement that you were surprised, quote, it was difficult to understand why fda was saying your eggs were responsible for seven people sick at one restaurant, correct? because you thought that your processes were good, is that right? >> that's correct. >> okay. now, the fda inspected your

facilities august 19th through august 26th, 2010, and they found numerous, quote, unsealed roden holes, lick in addition mature streaming from a crack in the mature pit, and uncaged hens tracking manure through the laying facilities. do you think that that's up to a standard of care, sir? >> those -- the rodent holes were open because -- >> do you think those findings are consistent with a high standard of care at the facility, yes or no? >> no. >> thank you. now, you said a minute ago when someone asked you about -- mr. braley actually asked you about the effect on the egg industry and you said you apologized for any inconvenience. do you have any idea how much the egg industry's profits have gone down because of these recalls? >> i would not know. >> do you know that, mr. decoster? >> no, ma'am, i have no

knowledge of that. >> well, mr. chairman, i think we will find that out because i'm sure it's millions and millions of dollars. mr. decoster, i wanted to ask you one last question and that is chairman waxman was talking to you about the condition of the facilities which you apologized for, but you also seem to think that perhaps the salmonella came in in the feed, correct? >> that's what we believe at the moment. >> okay. so here is my question. you're running large egg facilities. do you have a regular system where you test the feed that comes in to make sure that it's not contaminating the chickens that eat it? >> we don't test -- we did not test -- >> are you going to establish such a system now, sir? >> yes, ma'am, that's what i was talking about earlier with the testing every load and doing a weekly composite and sending that into the lab. >> right. probably you should have been doing that all along, huh?

>> hindsight, yes, ma'am. >> thank you. thank you, mr. chairman. >> thank you. mr. doyle for questions, please. >> thanks. i want to ask you about the role you played in hillendale's egg operations in iowa. when did you start working for hillendale farms? >> i was hired in march of 2010. >> and at the time of the recall, what were your responsibilities at the two facilities? >> i was overseeing the plant at west union and working -- trying to work into the opportunity to have more control of the day-to-day produchs at the alden facility. >> i understand that one hillendale facility a located in alden, iowa, and in a letter to committee staff dated september 17th, 2010, the lawyers for the company wrote that in this facility hillendale, quote, has virtually no authority over the

production and processing aspects and in regards to the second facility in west union, your company lawyer stated that hillendale has limited responsibility for the production and processing phases of that facility. can you clarify what role hillendale played at these two facilities? >> when i was hired in march by hillendale farms, they wanted me to come back and work with the west union facility initially, start to take a role in the day-to-day operations there, and as time went on hopefully to work into some day-to-day control at the alden facility. >> who owned the buildings on these farms? >> to the best of my knowledge, wright county farms owns the alden facility and as a shared interest in the west union

facility. >> how about the chickens? who owns the chickens? >> i don't have any direct knowledge on who owns those. >> how many hillendale employees do you have at each of these facilities? >> the people at west union are hillendale employees. it varies up and down. there's probably in the 40s in payroll there. >> in your testimony you stated that hillendale has terminated its marketing relationship with wright county egg at the alden facility. to your knowledge has hillendale have any other business relationships in other states with mr. decoster or any of his associates? >> that's outside of the scope of my job duties. >> so i guess hillendale didn't make the eggs, wright county did, but you're a major egg producer, too, and, you know,

you're in a position to know whether you're running a clean and safe operation. let me ask you, in light of this recall, how has this changed the culture at hillendale on how you produce eggs and do business? >> well, it's definitely going to make us take a closer look at what we do. we have hired two consultants to come in. the gal that was at the fda and a person with food safety at several fortune 200 food companies, we've brought them in. they're going to be doing recommendations to improve our food safety programs. we have discontinued our agreement with the wright county farms at alden. we have -- we will no longer be receiving pullets that wright

county has raised for the west union facility. we are bringing on another staff position at west union to increase and do a better job of documentation on quality control. >> okay. well, you know, hillendale farms is a brand i see in my store all the time in pittsburgh and i'd venture to say i've eaten hundreds of your eggs. i want to continue to feel god about picking those boxes up when i go to the supermarket. the important thing that comes out of this hearing and subsequently if we can finally get some -- a bill out of the senate, we just want to make sure that every consumer when they go into that store has a good feeling about a brand when they see it and your company has a pretty good reputation in my neck of the woods. so i was surprised to see your name mentioned when this broke out, but i hope it's a wake-up call to everybody in the industry that americans expect -- have a right to expect

that when they buy your food, your products, that you're not going to make them sick or worse yet cause them to die. mr. chairman, i see my time has expired. >> thank you, mr. doyle. that concludes the questions from the panel. i'm going to excuse this panel and thank you for coming today but you'd be excused. we'll go to our third panel in a moment here. >> on our it is the policy of this subcommittee to take all testimony under oath. do you wish to be represented by counsel? >> no. >> i will ask you to please rise and razoraise your right hand.

>> let the record reflect the witness has stated he testified in the affirmative, he and a stance he is under oath. you may begin your opening statement. >> thank you and good afternoon. statement. >> thank you. good afternoon. i am joshua sharpsteen the principal deputy commissioner of the u.s. food and drug administration. thank you for the opportunity to appear before you today to discuss the recent food born illness outbreak caused by salmonella. i would like to provide some general background on egg safety, discuss the outbreak and response, and then talk about what fda and congress can do to further protect the food supply. salmonella or se as it is known as a pathogen known to

contaminate eggs. contamination can occur when bacteria is passed from the chicken to the inside of the egg or when bacteria passes through fractures in the shell. if not fully cooked, eggs with salmonel can cause human disease. if an egg farm is out of control for salmonella, then many thousands of illnesses can result. it is estimated that contaminated eggs cause as many as 140,000 illnesses a year in the united states. in 1999 fda announced an egg safety action plan to reduce this enormous burden of illness. fda staff pushed for a decade to put into place specific safety standards at egg production facilities. the agency finalized its rule in july 2009 with provisions to take effect starting in july 2010. fda's egg rule requires producers to have a clear plan for preventing se contamination and to implement recognized control measures that reduce the

risk of contamination including buying chicks and yuck hens only from suppliers who meet standards, establishg rodent, pest control, and other biosecurity measures to prevent the spread of bacteria throughout the farm, conducting testing of the poultry house environment for salmonella, and if an environmental sarm is found positive, testing eggs and disinfecting the house befe adding new laying hens. refrigerating eggs at 45 degrees fahrenhe fahrenheit. before implementation, the number of se cases nationwide began to grow in late spring. by july cdc had noticed a significant increase and several states had begun conducting investigations to idtify the course of the problem. fda set up an energy response team to help sort through the vaous theories of what was causing the outbak and identities source. the agency relied on its field

staff in multiple states and working with cdc and our state and local partners. we traced the problem to eggs produced at several iowa farms. as soon as this was completed, fda recommended and wright county egg agreed to a major recall of eggs. fda also sent inspectors in to look at the also sent inspector look at the conditions of the nearby farms also under wright egg and hillandale, as additional epidemiological evidence accumulated. because of concerns about the conditions of these farms fda recommended and wright county egg and hillandale farms agreed to additional recalls. significantly, these recalls totally 500 million eggs came about two weeks before any positive lab findings. fda acted before conformatory evidence became available using our best judgment to protect the public health. fda inspectors found numerous

problems at both farms. these included significant deficiencies in pest control, significant problems in the handling in the manure and significant gap in biosecurity measures to prevent cross contamination and we also identified the s.e. matching the outbreak's strain in the feed mill supplies in the farnls which is associated with the wright county egg and environmental samples of muiple locations in the farms and in the water used to clean the eggs at the hillandale farm. we believe that there are multiple potential sources of introduction for s.e. on these farms. once introduced these farms did not have the systems in place to control the spread. in fact, some of the deficien deficiencies likely contributed to the spread of s.e. leading to widespread contamination. prevention of food-bourne illness is what consumers expect and deserve from our food safety system. with our state and federal counterparts, we a reviewing this outbreak to understand what the agency can do to improve its

work on behalf of the public. now that the egg rules' in place, fda's moving to quickly inspect other egg facilities to assure that strong preventive efforts are in place. we intend to inspect all 600 or so large egg facilities that are now subject to the rule by the end of calendar year 2011. in order for these inspections to be successful -- excuse me -- in order for these inspections to be as successful as possible, there is something congress can do to help us. propose legislation will give fda more tools as we're doing these inspections to assure compliengs including enhanced administrative attention authority, civil money penalties, stronger criminal penalties and mandatory recall. this critical legislation will also do a lot more than help make eggs safer. would it give fda the tools to establish appropriate prevention standard, much more efficiently across the food supply, and it

would strengthen fda's ability to hold companies accountable for meeting these standards with the new inspection mandate, new resources, and stronger enforcement tools. the legislation would also strengthen our ability to respond to problems through new traceabilitystandards, mandatory recall authority, and closer collaboration with our state partners to build upon and leverage their frontline cacities. we hope this congress will take the historic step of enacting comprehensive food safety legislation to give fda the resources and tools we need for a modern d effective food safety system. thank you very much. i'm happy to take questions. >> thank you, doctor. i'll went questions. salmonella, interrhyth it's a is a major cause of food-bourne illness in the united states. and it's my understanding that approximately 30 deaths per year are directly relate to the consumption of eggs contaminating with salmonella.

my question is and as weif we've heard today mr. dingell started about n1990. you mentioned 1999 the fda began to develop a rule. it's my understanding that the clinton administration in 2000 put forth a proposed rule. then it's my understanding nothing happened until 2004, and then president bush put forth a proposed rule. then what happened between 2004 anjuly of 2010? why did it take, if you will, 11 years toet a rule out on this? did different administration just abandon this effort? i mean the obama administration's been here since january '09 and put out a proposed rule of july '09 am i correct. >> that's correct. >> and years of comments back and forth, correct. >> it was a year for implementation. i mean, we actually -- i started at the very end of march as the

acting commissioner, and by july we had issued the proposed rule. this was a very high priority for the administration. >> do you know what happened a you put forth the proposed rule in july of '09, what happened between '09 -- i understand that president bush put it forward. what happened between '04 and '09, five years we lost. >> you know i wasn't at the agency at that time. i know -- >> but you have an agency put up time lineane see what happens starting back in 1999 and when it was firstproposed? because for a lot of people it seems pretty preposterous it takes us 11 years to put forth a rule. >> well, i can tell you some people who are career employees at fda has been interviewed that question. >> okay. >> and i'll quote one, bill hubbard, who maynow -- >> yes. >> who has testified before the committee. and this is a direct quote from him. that the fda simply couldn't get rough the white house. they're very hostile to regulation. i was told that each time fda tried to get the rule cleared through -- the response was quote, not enough bodies in the street. nat number of case,

hospitalations and deaths did not rise to the level that justified greater regulation of egg producers. obviously, public health officials fe strongly that there was a strong justification but the prevailing titude at the time within the administration was that regulation was an evil that should be avoid unless there was a compelling argument for government action. that was what bill hubbard stated. >> okay. i guess we have enough compelling arguments. but the final rule is put out july 9th, 2010, and it aims at reducing eggs that are harmful with salmonella. applies to egg producers with 3,000 or more egg-laying hens. this means, both hillandale farm and wright county egg must comply with the new rules. and in questions, both the gentleman from hillandale and the -- farms knew about the new rule. but what do we need to implement this rule? i have a copy of the summary from the fda of the -- on these

two farms -- or these farms here that we have the egg recall. starting in september 4th, 2008, to june 12th, 2009. there were approximately 178 violations. after the rule's out, starting on july 31st through -- of 2009, through july 26th, 2010 there's 207 violations. so it los like during this period of time when you have the prosed rule, it doesn't look like these farms are trying to do anything to comply with the rule. we have actually increased salmonella outbreaks after the rule's been proposed. >> you're referring to their testing of salmonella at the facility, i believe? >> correct. >> you know, those results were not disclosed to fda and under our rule, if you get a contaminated finding in the facility, you have to go ahead and test the eggs. so there would be a different response to that. those findings under the re. >> all right. so underneath the proposed rule,

or the final rule, i should say, if i have a positive test, i have to report it to the fda? >> if you have a positive test as part of the testing procedure, it is, in fact, available to the fda. >> but they'd have to notify you, correct? >> i don't -- it's -- i'll have get on back on whether if they notified us. >> let me ask you this -- >> it's not reported to us but available to us. >> okay. let me ask you this how would the newly implemented egg rule, what does that really mean for the american consumer, what can we expect? >> it means a lot. because it means that we can go now to all of the major egg facilities and we can make sure that they have very important preventative safe guards in place, including approach to rodents that keeps the rodents out of the eggs, and approach to general contination, approached to refrigeration, and an approach to testing. so that they can have confidence that the farms in the united states as you know overseen by

fda with an independent look, are following things to prevent illness in the first place. >> this final rule, that's now in place, and has the effect, appliesto those farms, egg-producing farmfor 3,000 or more egg-laying hens. how many farms is that in the united states? we've heard from two today but how many are there? >> i know that there are about 600 that are 50,000 or more. >> okay. >> i think that there are several thousand that are between 3,000 and 50,000. we'd have to get the exact number to you. >> okay. and my time has expired. mr. burgess for questions. >> thank you. thank you, dr. sharfstein for being here. so, now you have the ability to inspect egg-producing facilities is that correct? >>hat's correct. >> and now this -- >> well -- >> and just came under your jurisdiction in july? >> no, what started in july -- >> let me ask you a question, did you have the ability to do these egg inspections in 1999, 2004, 1990 while these other

das that had been mentioned? >> fda had jurisdiction over egg production farms, but we didn't have these standards against which we could inspect. >> were you prohibited from inspecting? >> no. >> let me ask you, this and i guess you've already answered the question about how many egg production facilities are under your jurisdiction, 600 large-scale productions with greater than 50,000 hens. now, over the last five years, coulyou give us a total number of inspections that had been done? >> we have been on -- in some these facilities because of outbreakand we could give you the number of inspection t we have not do general inspections and i think that there are two reasons for that. >> okay, number general inspections, then would be zero? >> i don't believe that we did any inspections. >> okay i'm just trying to ascertain. >> sure. >> you know, it's come up to us in newspaper articles, the decoster, they've kind of attracted some attention in the past.

>> uh-huh. >> why wouldn't you look. >> well, actually and bob brought it up a moment ago. you had a companion agency on the street, on the -- in the hen house, if you will did they not see an eight-foot pile of maneuver? a broke brokeeb down with the manure pushing outside? what do they look at when they're there just the size of the egg and whether it's grade-a? >> i can't speak for fda, but there -- >> an issue that is so important and sickened so many people by your estimation 100 cases a year and it's a high-risk food, why -- why wouldn't there be a tendency for crosscommunication between federal agency -- under the usda and the food d drug

administration? >> the fda's beevery concerned about this potential risk, that's why fda fought -- >> obviously not enough if the fda -- i mean an eight-foot pile. we've shown the pictures. that's got to get your attention. i mean, i know that you're just there to measure with a little mike romotter the diometer of the egg but holy cow how do you not notice that and a high-risk food and a high-risk practice and the decosters kind of had a history, why wouldn't someone say something? okay, we've got a food safety bill, we've got a food safety bill that's over in the senate d we've heard all kinds of stuff today about the problems. i supported the food safety bill. i worked on i i tried to amend it, make it a better product. ultimately it wasn't perfect but i voted for it both on the committee and on the floor of the house, but really, what did you have in that bill that you didn't already have? the recall, we heard the decosters testify, the minute that the recall was suggested to them, boom, they flipped the switch. they recalled the eggs. so it didn't -- it wasn't like

you had to go to court to get a court order to do it. they voluntarily did that. so all right we're going to have a mandatory recall of the new bill, that's great. but it didn't effect the outcome here. what would have efcted the outcome here is if one federal agency had used common sense and talked to another federal agency. how do we legislate that between the fda and the usda? >> fda and usda are working on improving communication, but i think the -- from my perspective, this rule is what gives fda the ability to be on the -- at these facilities inspecting for prevention and the law allows us to make those inspections. >> let me askiu. >> would allow us to make those inspections as effective as possible. >> my time's short. let me ask you a question about the law. you brought it up yourself. you talked about civil and criminal culpability. >> right. >> is there criminal -- is there the ability to bring criminal charges against one of these producers now if the conditions are found to be so egregious

that they should had been stopped? >> yes. there would be enhanced criminal penalties under the bill. >> but criminal penalties exist today. >> right. >> nothing is stopping you or preventing the department of justice from pursuing this if they decide to do so. it's unusual to have salmonella inside the egg, isn't it? >> not at this facility i don't think. >> but just in general, now would be there be any way nat consumer would know. if you have a rotten egg you crack the egg and it's trouble but this wouldn't create this kind of trouble, correct? >> correct, correct. >> had there been any other cases that the salmonella has occurred? any other the food recalls the egg recalls that the fda has overseen, have there been an issue -- issues with salmonella internal to the egg? >> absolutely. >> so do you have -- you have other studies that you have done that -- where you can compare and contrast what you're doing now with what has happened in the past? and i'd appreciate it if you would provide that to us. and i'll provide that question in writing. >> i think that this is a known risk and that's why fda's fought

so hardly. >> generally it's on the outside of the egg and not internal of the egg pywould like an accounting where the fda has been in the past with this. finally, let me just ask you, you said you started in march of 200in? right. >> i appreciated the kindness you showed me when i went out for a tour. your facility. when -- that's 18 months when can we expect your tenure and i'm story that we don't have the ceo here today but under your tenure when can we expect this to be better? you've had 18 months, you've known it's a problem, when is it going to improve? >> i believe that we're in a position to -- these inspections. to inspection the facilities that produce 80% of the eggs by the end the year fiscal 2011 and i assure that as we do that and the rule that we put into place very quickly in the obama administration, we'll be able to feel a lot more confident about the conditions under which the

vast majority of eggs are produced. >> so we won't be back here -- >> gentlemen, the time has expired. mr. waxman, questions sfleez thank you, mr. chairn. dr. sharfstein, it seems to me you have -- had a number of problems. you didn't have this egg rule in place. it's now in place. can you tell us succinctly what it will do to help fda prevent this problem in the future? >> sure. the egg rule requires certain types of preventive measures that will -- that keeps salmonella from getting in the eggs. and these include standards around rodent control, it includes standards around refrigeration, and it includes testing protocols. because salmonella does -- event in best managed facilities, get in but you've got to identify it quickly and control it.

so those are three examples. and the firms must have their own plan and they must keep to the plan. and by being able to inspect against the plan and we can have a high level of assurance that we will not see these situations again. >> then, why do we need the law to be changed as per the house passed bill on food safety, how will that help you? >> it will help -- we're look at 600 inspections by the end the fiscal year 2011. right now, we have very limited authority to do administrative detention. we have no ability to do civil penalties. we have limited criminal penalties. there are a number of things that will directly help us in this task of inspecting the other 600 facilities that we would like to inspect by the end of fiscal year 2011. and then of course, the bill goes far beyond just eggs. and there are other products out there where there are not standards and we don't want to spend a decade putting has to standards into place.

we want preventive standards in place, much faster for other products so we are not back here every six months as the committee has known to talking about in major other food recall. >> mr. burgess seemed to -- in the way that he asked the question, i got sense that he was saying, you don't real need in law because you have a lot of authority now. can you demand a recall, or do you have to rely on the company to voluntarily recall a product? >> well i appreciate that congressman burgess supports the bill. >> yes, he does. >> and i think that right now, we cannot demand a recall. it has to be voluntary and i do think you know in this case we're very pleased that as soon as we recommended a recall, you know, even before we had confirmtory latesting, the company did it. but we have 600 to go. and if we wind up in prolonged court battling with some of those companies we don't know what could happen. it's much better if we need to protect the public for us to be able to order a recall. >> how about penalties? if you find that some companies

have been acting inappropriately, and obviously penalties deter for the future, what can you do now? >> now? there are certain typesf criminal. penalties but it requires ve very -- and actually i could get you the exact penalties, but it obviously requires a big investigation to get there, we do not have the authority to assess civil money penalties which the bill would give us so would it be a much more flexible type of tool, a much more -- give us a stronger teeth for what we want to do to protect the public, via prevention ovoriented inspections. >> well that's civil penalties. how about iminal penalties? if you havi company that -- over a 30-year period constantly gets into trouble because they have salmonella in -- let's say

eggs -- and they've been assessed civil money penalties, they've been told by the states they can't sell their eggs in the states -- certain states any longer. what more can you say if they continue to nact a way that causes this problem to reoccur? >> well, criminal penalties are you know an option available to the agency and they would be strengthened under the bill. >> under the bill. but right now, you have to to the stice department. >> correct. >> and has the justice department ever sought criminal penalties, to your knowledge, against a food processor or food producer? >> i'd have to get back to you. >> okay, it seems to me from my recollection, it's very, very unlikely. and because it's so difficultto go to court and prove these cases, they usually settled with some slap on the wrist. i guess my time is expired. you feel that the fda is now in a position to do more because of

the rule that's finally in place, but with the food safety legislation that passed the house overwhelmingly on a bipartisan basis that will give you the additional tools, resources, and additional legal tools to make sure this whole thing will work and we're not going to have hearing after hearing on salmonella and peanut butter, eggs, spinach or whatever. >> here's my bottom line, we need this bill. we need this bill to protect the safety othe food supply, we need this bill to help us prevent another egg outbreak just like the one that we've expeenced and the one that we heard from the earlier witnesses so devastated their lives. >> thank you, thank you mr. chair. sn>> questions, please. >> thank you, mr. chairman. dr. sharfstein, i want to talk to you about both -- both preventing fo-bourne illness and also quickly identifying them and removing them.

obviously it's in all of our interests to prevent these illnesses from occurring in the first place, and i think that would be your top priority as well. is that main focus of the new egg rule. >> correct. >> as well. preventing the salmonella from getting in the eggs. and -- and by the way, i just wanted to clarify, it's not uncommon for salmonella to be inside the eggs, correct? it's not just on the shell of the eggs. >> yeah, i think it's well understood that one of the major roots of transmission is through the chicken into the egg. >> okay. and so -- so one thing that struck me with the previous panel testifying is they think it's -- despite all of the other issues the large piles of manure and et cetera, they think it's in part, because of contaminated feed. do these new egg rules address the feed issue? >> the new egg rules do help with the feed issue, but let me

say that fda has not reached this conclusion that you heard earlier from -- >> right, i understand that. but it would seem to me, no matter what the source of the salmonella inside the egg was, be it the manure or the rodes or the -- or anything like that, whatever source it would be, if you're testing the eggs, you should be able to identify that they are contaminated and then you wouldn't send them out, right? >> that's correct. >> so the testing's a big part of it. >> that's correct. and it's the responsibility of the company to identify if there's a risk. >> right. >> from whatever source and then when they find the contamination take action to control. >> and then go back and figure out what caused it. and remove that, correct. >> exactly. exactly. >> now, the second thing i wanted to ask you is, does -- does the fda currently, if the senate does not pass the food safety bill, have the resources to do all of the inspections that are going to be needed

under these new egg rules? >> as you know, fda's been significtly strapped for resources. and you know you should know there are 150,000 or so domestic food facilities and fda does about 18,000 food inspections every year. we are prioritizing under the rule of these egg facilities. so we will do them. but legislation which gives us additional resources as well as additional tools will make a tremendous difference in fda's ability torevent future outbreaks. >> and to inspect these facilities, correct. >> and to do all of the inspections that we're expected to do. >> okay, let me talk to you for a minute, then, after there's contamination, after the contaminated food leefts. >> sure. >> chairman waxman talked to you about mandatory recall authority, and as you pointed out, in this case, the company did, when told, voluntarily recalled the eggs, but that is not always the case, is it? for example, the peanut butter outbreak, where the company

resisted recalling the contaminated peanut butter for quite some time, and the government didn't really have the authority to do anything. correct? >> i can tell you, they'd been definitely instances where there's been some tsion between fda and firms doing a recall. >> and just the threat of a mandatory recall might make a firm hop to and recall tainted food even on their own before the fda had to exercise that mandatory recall authority. >> fda would intend to be extremely reasonable about using this because we understand people -- you know, the companies would be worried. we'd be reasonable but yes very much would like to have that availability. >> let me talk to you another issue that i care a lot about becausi worked very hard to include it in the food safety bill and that's t traceability provisions on our first panel, we heard one of the witness es said. -- and we have to identify which of the food is contaminated and where if came from. but having the traceability for all those food systems that's

interoperable. systems that are interoperable. that would help the fda more quickly identify the source of the contamination, wouldn't it. >> yes. >> and that's something that the fda doesn't have the ability to order right now under current law, correct? >> that's correct. >> so the food safety bill would really help, once -- if there was food that was contaminated, it would help identify the source much more quickly and enable that recall to happen so further -- >> people have complaid. i have spoken about the enforcemenprovision says. the bill, the prevention provisions of the bill. but the trace back is al very important. >> thank you, mr. chairman. i yield back. >> thank you, ms.egette. mr. braley for questions, please. >> dr. sharfstein, welcome. i have a very significant constituent who lives in farms

in new hartford waiowa and he's made a very important statement about these recalls. the recent egg recalls have troubled consumers and weakened confidence in our nation's food supply. when americans visit their local grocery store, they should be able to trust that the food they are purchasing to feed their family is safe to consume. that's a statement that senator grassley made in a letter to usda secretary tom vilsack, our former governor. do you agree with that statement? >> yes. >> now, one of the concerns that we have is that right now, among the 50 states, and the federal government, there is this hodgepodge of state requirements that rele to the production of eggs that may vary from state to state, and yet those individual state enforcement activities are part of this complementary network of this stood safety

enforcement that we have in this country, and i would like for you to share with us, your opinion as to whether we can continue to rely on a system where one state's requirements may have lower thresholds of food safety which then goes into a stream of commerce and goes around the country to other states, and whether we continue to have that -- can continue to afford that type of enforcement system given the problems identified with this egg recall. >> i would say that our goal is an integrated federal food safety system, where we're working with our partners at the state and local level, off of the same playbook and there's been a tremendous. a work at fda to move this forward. there's recently 50-state meeting, where we discussed what this system would look like. and the legislation would propel that forward in a number of ways. so our goal is for there to be a clear standard across the country, and for the states and

localities and the federal government to be in much great sync than they are today. >> what were some of the breakdowns that led to this half billion dollar egg recall between the fda and the state officials in iowa? >> i'm not sure that i would deribe it as breakdowns between the state officials and the fda. what fda recognized is having the importance of having clear prevention-oriented standards that then could be inspected against. and that's why very shortly after, you know i started fda and the administration's food safety working group came together, the administration priorized getting this egg safety rule out. having a period for implementation and getting it going as quickly as possible. so our focus is on getting that in place and that gives us the basis, the foundation to really work closely with states and

localities around clear standards. what the bill would give us is the ability do that in other areas, too, reasonable stanrd, integrate with local, state localities to prevent illness. >> and i want to talk about why this is so important. we know that every year there are about 5,000 deaths related to food-bourne illness in this country, isn't that correct? >> that's correct. >> and every year approximately 325,000 hospitalizations in this country related to food bourne illness and we've heard from witnesses here today about how devastating that can be to their quality of life. >> that's right and as a physician i've taken care of patients who have died from food born illness. >> so the other thing that we know about the bill that we passed in the house is that there is a cost-sharing that goes along with this responsibility and that most of the cost associated with the enforcement under the food safety bill we passed would be a result of fees in the food

dustry is that correct? >> that's correct. >> and so haven't these hearings that we've been holding in this committee, haven't they demonstrated why it's so important to save these lives and keep people out of the hospital by making food safety a higher priority in this country? >> yes. i think that the work the committee's ne in this area is extremely important and we really do appreciate the bipartisan support that this bill has gotten. >> thank you, that's all. >> thank you, mr. braley. mr. markey, for questions. >> thank you, mr. chairman, very much. as you know, mr. decosta, who's iowa facility, has been implicated in this outbreak, is also tied to a number of egg processing businesses in maine. some of these businesses may merely rent land from mr. decoster while others may have closer ties, like purchasing chicken feed from other facilities that mr. decoster

runs. as i'm sure you know, facilities owned and operated by mr. decostner maine have a long history of public health, environment, worker abuses and animal cruelty violations. so just to be clear, hathere be any recent salmonella inspections linked from facilities from new england's. >> not thai'm aware of but we'll get back. >> thank you. i think that that's important to note. to the best my knowledge, the answer is, no. bithink that we should nail that down. so that residents of massachusetts, other new england states, are not concerned -- >> well, let me say this, i think in the past, we have measured success or failure just by an outbreak but the way that we're looking at it now we'd like to have the insance that there is great preventive controls in place. and one of our priorities in doing these inspections is really getting that assurance. so not just you know -- there isn't a massive outbreak but that there is actually

prevention-ori don'ted standards and in picking which firms and which places to go, where to look first, we're going to be prioritizing companies that have had problems in the past. we will be reaching out to other agencies and we've been working with osha for example to identify if are there findings that other agencies have had. we have an agreement with nad we'll be learning from their inspectors. so we intend to use all of the information at our disposal to prioritize which companies need an fda visit quickly. >> so, just to go from the general to the specific, because i appreciate the direction which the fda is heading, so you plan to prioritize your inspections so that you start with t riskiest facilities like those in ine or other states that have a history of violations are those that buy feed or chicks from companies like mr. decoster or other repeat violators who own or operate is that correc

>> right. we'll be using a wide variety of data including information from other agencies, like usda and osha to help us prioritize the highest risk facilities. >> so, just to take it one step further, the nuclear regulatory commission gears its inspection regime towards those that have had the longest history of violations. >> right. >> you intend on doing the same thing. >> absolutely. >> and that maine facility falls into in category. >> i couldn't talk about a specific facility but i will tell you that we'll look at not only the history facilities, but corporate issues, if we have concerns about a particular owner, for example, that makes us think that other farms could have a problem that would influence our prioritization. >> but if it is amongst the greatest violate othen that's where you're most likely to be going first. >> that's correct, yes. >> okay, good. so that's an important -- i think -- and you can hear a sigh of relief going all over new england right now because of the record there, and again right

now there's no evidence but we want to make sure that we go in and get the answers as quickly as possible. the -- the gentleman who testified here today, did not testify here today, mr. decoster, clearly has no regard for regulatis until the point at which he actually gets caught. you know, that's a constant refrain that we hear from people who get sworn in to testify at that table, you know? we went from bp to salmonella, and it's a long history of witnesses at that table. and they're always then quite concerned that their actions have been misunderstood. do you think that you can, under your current regulations, guarantee that habitual violators like mr. decoster can be quickly caught and held accountable? >> well, what i testified to is that we are going to go out to

these 600 cilities, but our tools, what we can do when we get there are limited and that the legislation that is pending would be extremely helpfulor us to do the job well, because it wld give us a whole other series of tools to enforce the law. >> thank you. thank you for your service. welcome back to our committee. >> thank you. >> and thank you, mr. chairman. i appreciate it. >> thank you, mr. markey. that concludes all questions, and thank you, dr. sharfstein for being here and i want to thank all witnesses for coming today and for their testimony. the committee rules flied members have ten days to submit additional questions for the record to witnesses. i ask unanimous content -- unanimous consent that the contents of our document biner be entered into the record provided that the committee staff redactany business prioritize, relates to priechs concerns or law enforcement sensitive. the objection documents will be entered. that concludes our hearing. this meeting of the subcommittee is adjourned.

>> there was some action on the food safety regulation bill today in the senate. we talk with the congressional reporter for details. >> meghan mccarthy, senate majority leader harry reid and senator tom coburn were on the floor talking about the food sector bill. what happened? >> as we thought might happen, senator reid offered unanimous consent agreement and senator coburn was expected to object to the legislation. he really wanted to be paid for. it is supposed to cost about $1.4 billion over the next 10 years.

instead of objecting directly, senator coburn offered a modified unanimous consent .greement it is not clear yet what the offset will be. the majority leader said he would take time to consider it. next is a cell like they are closer to an agreement or for other way? -- does it sound like they are closer to an agreement or further away? >> it sounds like they are getting closer to an agreement. senator reid said he was going to take time, but i think it depends on what offsets senator cockburn is putting out there to pay for the bill. there is also concerned from a lobbyist us but with yesterday's. do they really -- a lobbyist i spoke with yesterday. >> what would the bill do?

>> the bill overhaul's how the food and drug administration make sure that food in the country is safe. that two biggest things the fda is really supporting in a lot of groups, and members are behind this, giving the agency mandatory recall of the origin, meaning they can recall tainted food products. a lot of people don't know that the fda cannot do that now. they have to ask companies that have contaminated products to remove them from their shelves, but it is ultimately the companies call. some other things that were highlighted in the eighth recall recently were improved -- in the the fda to trace products back to their producers and improve access to documentation on safety. >> there was quite a bit of

finger-pointing on that today. how does that affect what is happening on the senate floor on the bill? >> i think that dave -- that gave them a point to put pressure on the senate to actually do something with this bill. the house passed the legislation in july 2009. the sent has been working on it for a while. passed out of the committee unanimously, and they have a manager's amendment with republican supporters in the senate, so it just put pressure on them and was a rallying point for groups that are supporting this legislation. >> meghan mccarthy of congress daily. thank you. up next on c-span, president obama talks about new health insurance rules that went into effect today.

then, a house hearing on food safety regulations and the recent salmonella outbreak traced to tainted eggs. later, the heads of the department of homeland security and the fbi tested by -- testify about the threat posed by terrorism. on tomorrow's "washington journal," congressman john carter discusses the agenda that republicans will introduce on thursday. we will talk with senator told board about parts of the health care law taking effect tomorrow. -- senator tolbert. >> with the midterm elections less than six weeks away, follow the key races with the c-span video library, including a quick look at congressional districts around the country. our video library is all free, anytime. watch what you want, when you

want. the c-span networks, will provide coverage of politics, public affairs, non-fiction books, and american history. it is all available to you on television, radio, on line, and on social media networking sites. under our content any time pursues this video library, and we take c-span on the road with our mobile content vehicle. it is washington your way, the c-span networks. now available in more than 100 million homes. created by cable, provided as a public service. >> president obama today went to falls church, virginia, to hear from a group of americans who have benefited from the health- care law past six months ago. several provisions take effect today, including a ban on lifetime coverage limits. this is 50 minutes. >> hello, good to see you guys.

how are you? everybody, have a seat. i know it is warm out here. what's your name? thank you for coming.

>> how are you? >> thank you so much. >> welcome. we would like to welcome you to our backyard. we appreciate you all being here. we try to clean up everything, but watch your step. 36 years ago i was born with hemophilia. i like a specific clotting factor in my blood -- lack a specific clotting factor in my blood. it has been that challenge over the years. 2006 are reached a lifetime cap after three years. i was trying to figure out what to do, whether i should go on a disability policy, change jobs, and new states.

fortunately my employer came through and was able to cover my health care costs, but it was a significant stress for me and my wife. we had an opportunity to have this employer take care of us, which made a world of difference. the problem with hemophilia, 90% of cost or associated with the medications i take. that is really where i drive up health care, and it is important to have a policy that will cover that. it has been something i have had to work through. fortunately, the affordable health care act will remove some of those burdens and remove the shackles. i really won't have to depend on the job for insurance anymore. so the affordable health care act is welcome, and i expect it will make a big difference in my life and that of other people

who are affected. i would like to thank you for being here and i would like to introduce president barack obama. thank you for being here, sir. [applause] >> thanks for taking the time to be here. i know it is a little more under the sun, so if anyone wants to shift their chairs into the shade, i am fine with that. i will not be insulted. i want to just make a couple of acknowledgements of people who are here. first of all, i have the secretary of health and human services. she is charged with implementing the affordable care act. kathleen sebelius, former governor of kansas, former insurance commissioner, she knows all about this stuff. we are very proud to have her on the team. someone who helped champion the kinds of reforms and patients' rights that we are born to talk about here today, congressman

jim moran is here. congressman, thank you so much. [applause] and the falls church mayor. i know he feels blessed to be mayor of this wonderful town. when i came into office, we were confronted with a historic crisis. the worst financial crisis since the great depression. we have lost four million dollars in its -- we have lost it -- we have lost 4 million jobs in the first six months when i was sworn in. obviously, the economy has been uppermost in our minds. i had to take a series of steps very quickly to make sure we prevented the country from going into a second great depression,

that the financial markets were stabilized. we succeeded in doing that, and now the economy is growing again, but not as fast as it needs to. you still have millions of people unemployed out there. you still have hundreds of thousands of people who have lost their homes. there is a lot of anxiety and stress out there. so much of our focus day today is trying to figure out how do we just make sure that this recovery starts excel rating in a way that helps folks all across the country. when i ran for office, i ran not just in anticipation of a crisis. iran because middle class families all across the country were seeing their security eroded. partly because between the years 2001 and 2009, wages actually went down for the average family by 5%. we had the slowest job growth of

any time since world war two. the wall street journal called it the lost decade. part of the challenge for families was that even as their wages and incomes were flat lining, the costs of everything from college tuition to health care were skyrocketing. what we realized was we had to take some steps to start dealing with these underlying chronic problems that have confronted our economy for very long time. health care was one of those issues that we could no longer ignore. we cannot ignore it because the cost of health care has been escalating faster than just about anything else. i don't need to tell you all that. even if you have health insurance, your co-payments and premiums have skyrocketed. even if you get health care from your employer, that employers' costs have skyrocketed and they

are starting to pass more and more of those costs on to their employees. more people of good health care from their employers -- most people don't get health care from their employers. in addition, what we were seeing was at the state level and the federal level, the costs of health care, because people were not getting it on the job and were trying to get through the chip program or medicaid or disability or what have you, all those costs were driving our government bankrupt. anybody who is out there who is concerned about the deficit, the single biggest driver is the escalating cost of health care. it was bankrupting families, companies, and our government. so we said we had to take this on. most of all, as i traveled around the country, i would hear stories from families in every single state. they had a child with a pre- existing condition and could not

get health insurance. or they thought they had insurance, only to find out that in the fine print, there was some sort of a lifetime limit of the sort that paul described. suddenly they are out of luck and are potentially going to lose their homes or whatever savings they had because of the insurance they thought they were getting, it would not fully cover them. just as they got sick, the insurance company would have gone through their form and saw some innocuous mistakes and just dropped their coverage because they had not listed -- in some extreme cases, we had folks who had a gallbladder problem 15 years ago that had nothing to do with the symptoms they were now experiencing, but the insurance company said you forgot to list

that, so we are born to drop you from your insurance. -- we are going to drop you from your insurance. i have met young people who started often like getting their first job and were not getting health insurance and could not stay on their parents policies. the amount of vulnerability out there was horrendous. what i said to myself and my team was, even as we were dealing with this immediate crisis with respect to the economy, we have to start doing something to make sure that ordinary folks who are feeling insecure because of health care costs, that they get some relief. the reason we are here today is that thanks to an outstanding work by people like jim, thanks to an outstanding implementation by folks like kathleen, we are now actually able to provide some help to the

american people. essentially, part of the affordable care act that we can implement right now, and will take effect tomorrow -- francis knows. it will take effect tomorrow. the most important patient's bill of rights that we have ever seen in our history. let me just tick off some of the things that are going to be the case starting tomorrow. number one, already mentioned the issue of lifetime limits. that is not going to be the rule anymore after tomorrow. if you have a policy, you get sick, the insurance company covers you. no. 2, pre-existing conditions for children. they are going to be covered.

number three, we are going to make sure that if young people don't have health insurance through their employer, they can stay on their parents' health insurance up to the age of 26, which is obviously a huge relief for a lot of parents who are seeing their young people just coming out of college and not being able to get insurance. you are going to be able to make sure that the insurance company does not drop you because of an innocent mistake on your insurance form. this rule of precision, they are not going to be able to drop you arbitrarily, which gives you more security. number four, you will be able to choose your doctor and not have to go through some network in an emergency situation as a consequence of these rules. it gives customers more choice and more options. there are so many good things about this, i may have forgotten

one. kathleen, anything else? preventive care, i knew there was one more. preventive care will now be offered under policy, which over the long term can say people money. you get diagnosed quicker. all these things are designed not to have government more involved in health care. they are designed to make sure you have basic protections in your interactions with your insurance company, that you are getting what you pay for. that you have some basic measures of protection in interacting with the health care system, which means you are not going to go bankrupt, you are not going to lose your house if you end up having an accident, and you can get quality care that you need. obviously there are a host of other things involved in the health care reforms that we initiated. small businesses, were million of them are going to get a huge

tax break if they start providing health insurance to their employees. we have measures that make sure that medicare -- the life of medicare is extended. we just got a report today that the medicare advantage program that we had modified and scrutinized more carefully, that rates are going to be lower for that than they were before. i just met with state insurance commissioners from all across the country. they are newly empowered to look after consumers. i will just give you one example. in north carolina, in part because of the new levers that insurance commissioners have, the insurance commissioner there was able to get a $125 million rebate for 200,000 customers in north carolina. they are seeing the lowest rate increases ever. all this is going to lower makeiums, make care -- hel

health care more affordable and lower rates. rather than me do all the talking, i want to make sure that the people who have struggled in the past with the health-care system have an opportunity to tell their story, because basically the reason we did this was because of the stories i heard from folks like you all across the country. i want to make sure that a couple of you have a chance to tell your stories before i take some questions. awn.re going to start with do introduce yourself and tell us a little about yourself and your situation. >> i am from jacksonville, florida. i have been a self-employed entrepreneur since 1998. during that time, the majority of these years i did not have insurance because it was simply too expensive. 2006, my son wesley was born.

say hi. there you go. he was born in 2006, and that is when we finally got insurance. we had a few policies over the years and always had something excluded from it, even something as silly as your infections. in july of 2009, he had eye surgery. we discovered he had sudden onset of a condition called strabismus, and needed surgery. we had the surgery, and less than a year later, we said we needed new insurance. what we had was killing us with our premiums. this was right after the act passed. the insurance company gave us an affordable rate, and when she told us we were proved, my immediate response was, but what is not covered? i knew full well where were going to have exclusions for my

.on's ey she said we were covered. i said what about my son? she said he was covered. i said, what he needs another surgery on his eye, are you going to pay for it? >> she said yes, he is covered. she said we can no longer exclude pre-existing conditions for children. it did not hit me until later that night when i was talking with my husband as to why she said that. we started talking about it, and i realized something affected me personally from the government. it was really shocking. not only did we have a more affordable plan, but my son is now covered, no matter what happens. it is routine for children with strabismus to need multiple surgeries, and i know now it will not have to come out of our pocket, which was a big fear. i am very thankful and grateful. thank you for everything you have done, president obama, and

everything everyone has done to push this through. it has made our lives so much less stressful as an average american family. >> that is a wonderful story. i want to talk to dale, who flew down here from new hampshire. i had a chance to talk to dale a few days ago. i had received a letter from gales husband, telling us their story. i was so touched by, and it was wonderful to have a chance to speak to her personally. >> you made my day. in march of this year i was diagnosed with high grade, the stage to the non hodgkin's lymphoma. i was uninsured. i worked full-time as a preschool teacher at a montessori school that did not offer insurance to their employees.

it was not fear that i had cancer, it was how was i going to pay for the outrageous bills that were going to come my way? we would have had to go into our retirement fund and use all that up. we have one son in college and one on the way in two years. we would have to use all the money we had saved the paper my medical bills. when we heard about the high risk pool and that it was in effect in july, we got right onto it. we call people, we got all the criteria in order so that we were actually insured on july 1. my doctor let me wait for three months to start chemotherapy and radiation, and on july 5 i started chemo. i am doing radiation right now. i am doing great. if it was not for this bill, i would probably not be feeling great, because i would be so

stressed out and worried about paying for my medical bills. now i can focus on my health instead of focusing on how am i going to pay to get better. so i personally thank all of you so much. you do not know how this has changed my life and how grateful i am to you. >> i really appreciate that. i should have mentioned this for gail. children with pre-existing conditions are covered. we had to phase in the adult side of pre-existing conditions, because it is more complicated trying to get that whole pool of adults. what we did in the interim, by 2014 we are going to have in place or will for insurance companies that they cannot bar anybody with pre-existing conditions from getting insurance, not just kids.

in that interim, over the next several years, we want to make sure that folks like gail have help. we have set up the pre-existing insurance pools state-by-state. gail was the first person to sign up in new hampshire. we have thousands of people across the country who are now stunning of -- signing up to get this set up. in some cases, you have situations where you could get insurance directly if you have a pre-existing condition, but the costs were so exorbitant that it was just impossible. some people in certain markets could not get insurance at all. now we are able to provide an interim step that helps directly for people like gail. we are really proud about that. i just want to open it up for any questions, comments,

concerns that people have. we are focused mostly on health care, but if you want to talk about what happened to the redskins on sunday, we can talk about that, too. at's make sure everyone gets microphone so we can hear them. introduce yourself, if you don't mind. >> i am from new jersey. i am curious to know what can be done about the insurance companies and medication. as it stands now, the insurance companies rule, when the doctor's order, they either fuse, or they have to go back to the doctor and argue with his office as to whether or not you can have it. >> under medicare, prescription drugs are covered under part b, but for a lot of seniors, they still have not been affordable

even under part b. one of the things that was part of the reform act was us slowly phasing out something called the don't hold, which i am sure you are familiar with. the way it was set up -- call the doughnut hole. under the previous administration, you were covered up to $2,000, $3,000. once you hit that threshold, there was a term where you were not covered for a nother thousand dollars, and if you had to still buy more drugs, you would end up being covered again. you had this doughnut hole, and a lot of seniors fell into it. we are beginning to close that now, first by providing some supplemental assistance to seniors. a couple million seniors have

already received checks of 200 bit to dollars. >> -- $250. >> i was able to get my heart medication when the check out there. >> that is a wonderful story, and that is exactly what we want to make sure of, is that you don't have to make decisions about whether to get your medication or not. >> i thank you from the bottom of my heart. >> i appreciate that, but you are making another point in addition to that. a lot of times, there is a process of decision making between doctors and medicare about what drugs are going to be covered. one of the things that kathleen is trying to do is make sure -- i don't want you have to use your healthcare plan right now. one of the things we want to do is make sure we are trying to figure out how we can simplify

and make it easier to understand what prescription drug plans are out there so that you know ahead of time if you are primarily concerned about your heart condition and the drugs you need there. are you able to find a plan you need that covers the drug that doctors recommend. that is something where i think we can still make some significant improvements. kathleen, do you want to add to that? >> one of the things that will become clear when the new medicare information comes out about october 8, you will have a pre enrollment period. there are two pieces of news on the drug's side. one is that we have made plans be more clear about what drugs are covered, so seniors can make the right choices. if you need hard medication or liver medication, you can make sure you sign up for the right plan. secondly, starting in january,

the sheer was the one time, $250 check. next year, a 50% decrease in all of the brand-name drugs in the doughnut hole will go into effect, and we received some good news from companies that every company is going to participate in that. so the kind of featuretwo undera lot of drugs that you have to buy in the doughnut hole but there'll be a 50% discreet -- decrease. i know that was a big issue in the house and one that people felt very strongly had to be part of the affordable care act, getting rid of the doughnut hole. it is going to be very good news. people said it will never happen and drug companies all stepped up and said, we will continue to participate in it will happen. >> i'm a fourth year medical

student at howard. i am one of the people that has not been able to go to the doctor, ironically, because i m in medical school and i cannot even go. i just wanted to know what steps we are going to take after it is passed and goes into full effect to encourage young people to go see the doctor and take preventative steps just as older people? i feel like we are left out. >> as i said, up to the age of 26, and you will be able to stay in your parents coverage and that is important for a lot of people. you look like you're 22? >> i wish, 24. >> i was that -- i was not that far off. they wish. 24 is just fine. [laughter] you can stay on your parents

policy for a few years. all the policies are going to cover preventive care. getting a mammogram, that has to be part of your policy, and you no longer have to pay significant out-of-pocket costs that may dissuade you from getting the kind of preventive care that you need. and if you are a medical student, you know better than i do that so much of keeping ourselves healthy is the one what is going on and going in and getting regular checkups and being able to monitor your health. my mother died of ovarian cancer, and she did that have steady health insurance during her life because she was essentially a self-employed consultant. ovarian cancer is a tough cancer once you get it.

it's tough mainly because it is typically diagnosed very late. i cannot say for certain that if she had been diagnosed earlier, she might be with us here today, but i know that the fact that she did not have regular insurance meant that she was not getting the kinds of regular checkups that might have made a difference. that is true for young people as well as old people, the provision i just talked about -- preventive care. if you've got insurance, then preventive care is going to be covered and they should make a difference. and that should save us all a lot of money. the toughest thing about this health care debate was -- and sometimes i fault myself for not having been able to make the case more clearly to the country -- we spend, each of us who have health insurance, spend about $1,000 of our premiums on

somebody else care. what happens is, and you do not have bet the insurance. you could to the emergency room. you are now getting a checkup, something that might have been curable with some antibiotics is not caught. but the time to get to the hospital, it is much more expensive. the hospital cares for you because dossers and nurses, they do not want to just turn somebody away. but they have got to figure out how do they keep the doors open if they are treating all of these people coming into the emergency room. they essentially pass on those costs in the form of higher premiums to the people who do have health insurance. we are already providing these subsidies, but it is the most inefficient possible subsidy we could provide. we are a lot better off if we are making sure that everybody is getting preventive care, we are encouraging wellness programs where people have

access to doctors up front. that is why we feel pretty confident that over the long term, as a consequence of the affordable care act, premiums are going to be lower than they would be otherwise. health care costs overall are going to be lower than they would be otherwise. and that means that the deficit is going to be lower than it would be otherwise. understand -- i want to make sure that everyone is clear. the congressional budget office which is independent, it is historically bipartisan, it is sort of the scorekeeper -- says that as a consequence of this act, the deficit is going to be over $1 trillion or of it as two decades than it would be if this was not passed. and the reason this is so important is because right now there is a political debate going on about, should we maybe repeal the health care act -- because a part of big

government. and you've heard the republican leader in the house says that that is one to be one of our priorities, chipping away at the health care act. i want to see them come to talk to gail or talk to dawn or talk to any of you who now have more security as a consequence of this act, and i want them to look you in the eye and say, sorry, gail, you cannot buy health insurance. sorry, little wes, he is going to be excluded when it comes to an eye operation that he might have to get in the future. i do not think that is what this country stands for. but what they are also going have to explain -- why would you want to repeal something that congressional budget office says it's going to save us a trillion dollars if you're serious about the deficit? it does not make sense. it makes sense in terms of politics. and polls. it does not make sense in terms of actually making people's

lives better. anybody else? go ahead. kathleen has got a mic. >> i want to thank you, first of all. i have a son with intractable seizures and this bill will make a huge difference in our lives personally. i want to speak on behalf of small business, because small business has been used as an argument against this bill and i find it very hard to understand. i think there is a huge campaign in misinformation. we were about ready to make a choice between not insuring our employees anymore because we simply cannot afford it -- it was $90,000 a year and one-third of our payroll. or close our doors because we had no choice anymore. and this bill and the tax increment that i get back takes that statistic from 30% to about 18%. it makes a massive difference in the fate of our business and in the fate of all our employees who are insured. we did not want to drop our

policy, and in the fate of our son. what can we do about this misinformation? it seems so pervasive everywhere and it is so wrong. i think this bill is really affordable for small business and i want some way to get that word out. >> i appreciate that. tell me what kind of business you have got. >> i on a bookstore. in utah. >> i love bookstores. >> i have followed your career as you go from one to another. >> i used to be able rummer around in bookstores. now was more noticeable. so if you have been providing health insurance to your employees, but what you're saying that because you're not xerox or general motors, you do not have this big pool, so you are in the small pool insurance market. like the individual market, you're seeing your premiums going up and up and up. what was happening to them over the last several years?

>> in 2008, three of us hit 60. that's the place where they really go up. our premiums shot up to well over to 30% of our payroll, which shot our payroll up to 30% of our gross, it totally unsustainable. >> that's basically margin. >> way more than the margin. >> eats up whatever profits you are making. as a consequence of the affordable care act, we have 4 million businesses like yours that are not eligible for significant tax reductions that will pay for up to 33% of the premiums that you're paying for yourself and your employees. that goes directly to a small business's bottom line. what you will hear is, some businesses are now mandated to provide insurance, and that i have to provide insurance, then

i will hire fewer people. but it turns out that actually -- and kathleen will correct me if i'm wrong on the statistics here -- it turns out that because employers with 50 employees or less are not subject to any penalty for not providing health insurance, about 96% of small businesses, they do not have any requirement on them but they can take advantage of it. it is true that if you have got a business that has 1000 employees in your not providing them any insurance whatsoever, and we're saying that is not fair because all the rest of us are going to be paying for those folks when they go to the emergency room or they apply for medicaid or what have you. so we say, if you provide insurance, we provide you help. if you do not, then we will charge you for the fact that somebody else is going to have to cover those costs.

but for the vast majority of small businesses, this is a great deal. and we have got testimony here to show it. in terms of how to get the word out, no with -- nobody is more effective than you. all reporters were here, i hope it will record what you just said it will help get that word out. but it is a challenge, because there was opposition from the chamber of commerce and some other small -- and some other large lobbying organizations in washington that said they were speaking for small businesses, but when you looked at the facts, this was good for small business. nobody benefited more, because nobody is getting hurt more by health care costs than small business. thank you for sharing your story. anyone else? i know it is warm out here but i want to hear from as many people as i can. >> thank you very much, mr.

president, for having us here. i just have a comment. my son sammy who was here is seven and he has neurofibromatosis. have you ever heard of it? >> you should describe for us what that means. >> he had a spontaneous mutation on his chromosome. he was diagnosed 2.5 years ago. your tumor suppressor does not work properly so every nerve cell has the potential of becoming a tumor. judy which is pretty nerve wracking for mom. >> is unbelievable. is a wide spectrum, so some in up with minor complications but others have serious problems. he has already had surgeries and things of that nature. i won at bank you because it is life changing for a parent. >> sammy looks terrific. i saw him running around here. >> he is terrific. >> i am glad to give you peace of mind. people ask me how i stay on in

my job. the reason i stay calm in my job is that every night at 630 -- 6 30:00, no matter how busy i am, i go upstairs -- i got a very short commute -- and i go upstairs and i have dinner with my wife and my daughters. as long as they are doing good, as long as they're healthy and happy and running a wrong at -- running around and telling me stories about the crazy things that happened in school today, then there is a certain baseline that just gives you that sense, well, i can take anything, right? if the flipside is when malia or sasha get a sniffle or an ear infection or a scrape for juste, i'm over there miserable. i still remember sasha, when she was three months old, one night

she just was not crying right. as a parent, you start recognizing, that is not how she cries. she was not hungry. it was not a diaper change. something was going on. we called our pediatrician, and he said, why don't you bring her down? and this is in the middle of the night, 1:00 in the morning. and he was willing to see her and he pressed on top of her head, and he said, you know, she may have meningitis. i want you to go to the emergency room. it turns out she had meningitis and she had to get a spinal tap, and they had to keep her there for three or four days. the doctor was talking about, and yet this did not -- if her temperature did not come down and if we did not solve this,

she could have permanent damage to her hearing or other effects. but i still remember that feeling of just desperation, watching the nurse take her away to provide treatment for her. but i was thinking, what if i had not had insurance? what i was looking at my bank account and and did not have the money to cover her? how would i be allowed to face my wife and how would i be able to look in the mirror if i did not feel like i could somehow make sure they were ok? what this is about, ultimately. we have got to make sure that health care -- our health care dollars are used smartly. we've got to make the system

work better for consumers. we've got to make it more responsive. but the thing that is most important is we have just got to give people some basic peace of mind. i am so glad i am able to stand here before you and hear these stories, and hopefully it gives you a little more peace of mind. [applause] thank you, everybody. appreciate you. and if anybody else has any questions, they can come up and we can chat in the shade here. because i do not have to go right away, and these guys will take some pictures. so thank you.

[inaudible]

>> jim did not have a chance to tell his story. >> my wife and i have 27 years,

we have full coverage to work full-time employees and their families. a law seven years, premiums have gone up 100%. last year they went up about 13%. this year, according to our accountant, because of the affordable care act, we would get between a $15,000 tax break. i told our broker who said that our premium does not review until november. he is speculating based on the affirmation so forth and our premium this measure will corp. 3%. -- will go up 3%. that is like going back to 2008. >> and you can use that to provide health care insurance to your employees. >> absolutely. my daughter just graduated.

>> it's important to note that and thank you. c'mon, c'mon. >> you're reading the doughnut? that makes sense. come on. bank you. -- thank you.

tammy, they're right in here. tammy, step back from bonn -- a minute and grab your mom. thank you so much. a picture in the front. all right. do we have anyone else? >> we have got to go. >> all sap? -- all set?

[inaudible] can everyone say thanks to paul and francis? [applause] for those of you that came in, we really appreciated. help spread the word about health care. people do not believe politicians but they'd do believe the people that are out there.

you guys of the ones that can really make a difference. thank you, everybody. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> president obama also met with state insurance commissioners at the white house today to discuss implementation of new health insurance rolls. those commissioners to talk to reporters shortly after the meeting. this is 10 minutes. >> i and the insurance commissioner in west virginia, and current president of the

national association of insurance commissioners. we appreciate the opportunity to be here today and the opportunity to to meet with president obama and his health implementation team as we move toward with respect to the implementation of the health care reform act. the national association of insurance commissioners is very much at team partner in this initiative with president obama is health team and their implementation in the legislation providing for the national association of insurance commissioners to work very closely to help implementing ratios and working to ensure that consumers understand that changes in a lot and the education, and we also have a number of working groups working on the definition and

all the implementation pieces. today was a very positive meeting from our perspective in being able to share some of our concerns and's with president obama and his secretary of hhs and the secretary of labor, who are also a big part of the implementation process. we appreciate that they recognize that we are the consumer protectors, the people that are at the boots on the ground working with consumers, and the insurance companies on a day in, day out basis. >> on the insurance commissioner in the state of new hampsh